Some practices in the wine-making business have improved over the past two years, but the ACCC is considering regulatory action should the industry not self-implement “important reforms”.
The warning comes after a two-year investigation into the industry which found “concerning” issues in the supply chain leading to a lack of competition, unfair contract terms, a lack of price transparency and an imbalance of risk against grape growers.
“The wine grape industry has made important progress in addressing some of the issues identified in our [initial] study, but we believe more work is needed to improve price transparency and shorten payment times,” ACCC deputy chair Mick Keogh said.
“Despite the ACCC’s recommendation for a best practice standard of payment within 30 to 60 days of grape delivery, many winemakers have not significantly reduced the length of their payment terms [from up to nine months].”
Growers also have difficulties accessing timely and accurate price information, which makes it difficult to make decisions around contract renewals, choosing which winemaker to supply grapes to, and whether what they’re being paid by a winemaker is a fair market price.
However, a large number of winemakers had signed up to a voluntary Code of Conduct across the Riverland, Riverina and the Murray Valley, committing to adopt a standard grape quality assessment process.
“It’s been a challenging couple of years for the wine grapes industry [and] the sector has achieved some important progress, however, we will consider recommending or taking further regulatory action if improvements aren’t made on price transparency and lengthy payment terms,” said Keogh.